DIAZ: NJ loses its soul to corporate real estate
Column: In The Know With Abby
If there is one thing college teaches us, it is the art of being the architect of our futures. Undergraduates have to pick which major will offer them quality internships, lead them to the perfect job and ultimately give them the dream home that we all hope awaits.
With those ambitions in mind, it's important to acknowledge the abundant financial and homeowner advice that can sometimes be found on one's TikTok "For You" page. So many financial tips have been thrown around on social media, from parents buying houses for their children to homeowners owning a duplex where a tenant lives in the other space.
For students who are on the cusp of completing their Rutgers undergraduate careers and turning that financial advice into a reality, they will soon realize there are more obstacles to obtaining affordable housing in New Jersey than they could imagine.
The primary issue crippling renters and new homeowners across the state is the predatory practices of LLCs and corporations that dominate the housing market.
New Jersey is already known for having high taxes, and now, it will also be known for renters having to deal with corporations owning vast real estate who charge absurd rates and take aggressive stances towards their soon-to-be tenants.
Newark and Trenton are at the forefront of these changes. A Rutgers—Newark study demonstrated that rent was increasing across the state as a result of corporations owning rental properties and owner occupancy decreasing.
These corporations beat out the average renters and future homeowners as candidates for these properties because they are able to produce all-cash offers, receive lower interest rates and bid with higher offers.
The average New Jerseyan already has interest rates and mortgages to consider when considering bold financial moves, like buying a home or finding an apartment to rent. But the aggressive growth of corporations expanding their domain into real estate is just another issue that can encourage recent graduates to stay home with parents, perpetuate homelessness and destroy communities.
The study also proved that in Newark, "anonymous corporate buyers purchased almost half of the city's residential housing stock, the highest rate of this type of real estate practice in the nation," from 2017 to 2020. If companies can own half of the land in a city, coupled with the financial leverage they have, they essentially have a majority of the power, which then diminishes the voices of average citizens.
Moreover, the amount of money New Jersey citizens must set aside to cover rent is both physically and mentally taxing. U.S Census data revealed that from 2017 to 2021, New Jersey homeowners spent at least a quarter of their income on rent, and many even went above the national average of almost 30 percent.
Hard-working college students with part-time jobs, sometimes two, already cringe when they see how much money they could have gone home with before taxes. And now, with corporations on the prowl, those who live in communities with the lowest income in New Jersey have minimal opportunity for affordable housing.
The National Low Income Housing Coalition even "estimates that New Jersey has a shortage of more than 200,000 homes affordable and available to extremely low-income renters."
The issue exposes the lack of affordable housing protection in New Jersey, and although there may be legislation in motion to address these issues, there is no telling which ones will actually be implemented and when their effects will be seen.
Rutgers students should keep an eye on the rental property playing field as Newark, Trenton and New Brunswick are in the midst of it. For upcoming graduates looking to start their new lives after college, they need to be aware of what policies can help curb rental rates for areas they want to live in so that they align with their income.
There needs to be a future path in which people can do more than just make rent in New Jersey.
Abriana Diaz is a senior in the School of Arts in Sciences, majoring in political science and communications and minoring in critical intelligence. Her column, "In The Know With Abby," runs on alternate Mondays.
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